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Wednesday, February 02, 2011

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Wave Rust

yel,

Bush lifted the executive order banning offshore drilling in july '08 and crude topped within 10 trading days and the dollar bottomed at the same time.

Which is leading? it doesn't matter to me.


my guess is, if today, Oblahblah actually does the same thing Bush did, lifting his BP offshore ban, crude will crash and take the market with it.

Oblablah's painted himself into this corner again ,,,, idiot ,,,, lift his ban and crash the markets, or, give another anti-mubarak speech.


When and if they go their separate ways, so be it. But this cairo crap has been so screwed up by two big mouths, clinton and oblahblah, that I'm starting to miss Jimmuh again.

Here are the weekly charts to compare.

dollar
http://www.barchart.com/chart.php?sym=DXY00&style=technical&p=WO&d=M&sd=&ed=&size=L&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=&x=48&y=14

crude
http://www.barchart.com/chart.php?sym=CLY00&style=technical&p=WO&d=M&sd=&ed=&size=L&log=0&t=LINE&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=&x=50&y=11

Now, if mubarak falls and leaves a vacuum, who's your favorite moslem brotherhoodlum leader choice to run Egypt back to the 15th century? "Big Al" Baradei?

israel will be surrounded again completely by government that are actively readying to attack. Jordan is just the last domino.

Lebanon syria Jordan, gaza, and the second ring of egypt, saudi, iraq, iran and turkey

end of days? Straights of hormuz next? Aden, suez and the red sea?

not much of a stretch, imo.


but the question is who benefits? who wins? and who can trade this set up?

got natty?


wave rust

Virgil

Bulkowski's patternsite.com defines h & s differently.
By his definition AUD/USD could be forming one right now.
Neckline support is the trigger but short term support above that is 1.0050.
Confirming gold one month later?

Wave Rust - the day of the lord comes as a thief in the nite. Be ready cuz God doesn't give any set ups.

Account Deleted

ES Chart: http://niftychartsandpatterns.blogspot.com/2011/02/s-500-futures-before-opening-bell_03.html

Wave Rust

virgil

rofl I think he does give setups. only problem is, ya gotta know what to look for.

dan, izzy and john told ya what to look for.

:)

wave rust

Steve Cohen

Wave,

Thank goodness we have such an EXPERT as you when it comes to international relations!

You've clearly got it ALL figured out.
Too bad you couldn't trade your way out of a paper-bag.

Rtk66

The dollar is rallying now...the STU hit one after a while...

Virgil

> "only problem is, ya gotta know what to look for"

Thus far shall you come, and no farther, and here shall your proud waves be stayed

Right on bro. I just don't think we can ever see it all.

Wave Rust

virgil

i don't think we can see it all either ,,,, especially with my bad eyesight. :)

what's your opinion of the mideast crap? is this about as screwed up as it has been since the 50's and 60's, or is it just my imagination?

wave rust

Wave Rust

virgil

there would be alot more successful traders if they studied bulkowski's work.

the intraday ascending tri (inside of the daily expanding) on spx was broken at the close ytd.

might be headed to dow 11,891

wave rust

Virgil

I get most of my foreign affairs information from Statfor. They're the best. They say the military is still in control. Nassar, Sadat,& Mubarak were all military guys, so that's the common thread that held the country together the last 50 years. They wanted Mubarak gone long ago because he was going to put his son in power who's not a military guy.

The only thing we don't know is what side the military is going to fall - the liberals or Islamists. I saw Mubarak's son on Charlie Rose last year and he sure sounded pretty liberal to me, except for the obligatory anti-zionist rigamarole. If the military wanted him gone, I suspect they're going to fall on the side of Allah, but I doubt they'll do anything to jeopordize they're control.

The other thing to think about is the Brotherhood. Fox News is all in a frenzy about them. They see this domino effect, indonchina style, leading a new Moorish empire into Europe. It's not entirely clear if they renounced violence or not, but there's never going to be a new Caliphate. I see this as a Sunni revolt against the growing influense of Shias in Iraq & lebanon. If anthing we may see a Pan-Arab Civil War.

You're right though about Israel. They're screwed. Stratfor has been saying for the last couple years that since Turkey flipped to the Islamist side, they were in trouble. They always considered Egypt as the center of the Arab world. If they back out of the Camp David Accords, the stuff is going to hit the fan. Israel probably has to throw in with Syria, the Sauds, and maybe the Kurds I guess. One way or the other the neighborhood is getting a lot rougher.

Wave Rust

syria is bathist/neo-nazi, like sadam hussein. saud's have the devils bargain with the wahabs for generations.

kurds are proud but have no money, some oil, but no country, just a 'region'.

afghanistan is the biggest collection of hatfields and mc coys dressed up as opium traders.

Pakistan's got nukes and iran's got nukes with a virus.

india has nukes and doesn't like any of the above.

china is keeping things churning.

bathists and persians were buddies with hitler ,,,, so who's left?

israel has only one friend in the region, the US ,,,, and we're there as unwanted "guests".


wave rust

Virgil

>"there would be alot more successful traders if they studied bulkowski's work."

Looks like a descending broadening wedge right now. Upside break to follow?

Hockthefarm

"that I'm starting to miss Jimmuh again."

Well Jimmuh had a lot on his mind when he dealt with the Shah:

Like the assasination of a democratically elected, pro western president who wanted a bigger slice of BP's oil revenue for the people of Iran. A mere drop in the bucket by today's standards.

A puppet dictator (elected by no one) installed for all those years.

Management of the Stasi police force that killed 24,000 people during the Shah's run of terror.

Jimmuh didn't paint the canvas.

Hock

da bear

yelnick, I am looking at a dollar rally to about 97-105 then a crash to around 50.


da bear

Eventhorizon

quote: Oil and the USD are pretty well locked into an inverse relationship (Oil up. Dollar down), although it often is not clear which is the driver.

Is this true? Correlation coefficient on the log(close / prev close) over the last 100 days is -0.392, compared to -0.158 for the last 15 years. So, is this a significant difference?

Create 5,000 random samples of 100 days from the full data set (i.e. all 15 years). We find that only 5% of these samples show a correlation coefficient less than -0.36. The most recent 100 days show R = -.392 < -0.36. We can conclude that such a large negative value for R would show up by chance less than 5% of the time.

Of course, having said that, -0.392 is not a hugely negative correlation. As you would expect all the other currency futures have a larger -ve correlation than that (Euro: -.98), but also S&P500 shows -0.46, and all the metals show similar R's to oil.

I would say -ve correlation has increased significantly US$ vs Oil, but it is hardly "lock-step" (see the Euro).

As for one leading the other, if you explore R for any lags from -10 to +10 days (as I did) you will find ALL the values of R are 0.0 something. i.e. there is absolutely no leading or following relatinship in the data.

adg

FED is pumping money, the market goes up! SP500=1500 by the end of march, gain without any risk :)

Chabazite

Israel probably has to throw in with Syria, the Sauds, and maybe the Kurds I guess.
-----------------------------------------------------------------------------------
Err ... Why?

Mamma Boom Boom

What are the odds of the market hitting an 'Air-Pocket', something as big as the May crash or bigger?

I have not been giving it much of a probability, but if trends continue, it will soon be on my radar screen.

Neo-Mamma

Piss Off, Moron

Oooh! Scary! How do you sleep??? You're so brave and smart! And you could make so much money if you sold your "radar screen"!

joe

Good Post Yelnik – I think you are dead on right.

I am quite certain if one could figure out the equivalent dollar value in 2011 dollars of what $2.00 per gallon gas was in 1979 dollars you could calculate the highest high crude could reach.

I am pretty certain of this.

Joe

gaffer

yo> ...piss off moron yeah u

don't b a hater

ya all too short term

time frames define risk and size

need we spell that 1 out for ya

Virgil

>"Err ... Why?"

In '48, '67, & '73 Israel fought wars for their survival with Egypt. After Camp David, their southern front was free of war. Jordan followed which eased threats from the west. In the 90s they allied with Turkey which kept Iran at bay. This left low intensity conflicts with Lebanon to the north & Palestinians internally. Resources were freed up, the Jewish state thrived.

Now Turkey is openly hostile, Iran wants to send to ship them all to Switzerland, and Egypt could be going that way too. Whichever way they go, Jordan probably goes too. If Jordan goes, the Palestinians get stronger- Hashemites hate Palestine as much as Israel

Virgil

Bulkowski had an article in Technical Analyis of Stocks & Commodities a couple years ago bout how he's found chart patterns had a lower probability of success recently. I wish I could dig it up but its buried somewhere in my library/junk room. The gist of it was there was greater success in the 90s than the Oughts. I noticed in one of Zoran's missives he came to the same conclusion, attributing it to excessive leverage & derivatives.

Yelnick - got around to watching Desk Set. Score one for people. And Spencer Tracy is just plain cool

Hockthefarm

Virgil:

"Now Turkey is openly hostile,"

I'm a bit surprised at this view. I recently spent a month in Istanbul, Antalya and Ismir, and found Turkey to be a wonderful country. The people were friendly, well educated and hard working. Istanbul is almost 40 percent Christian and is one of the cleanest big cities I've ever been to.

Cairo, by contrast is a filthy backwater (worse than Athens) with diseased dogs running every where. You are immediately hit by the massive throngs of wretched, uneducated people with nothing to do.

Istanbul is the very antithesis of Cairo. If someone wanted to understand the difference between a secular, multi party democracy and a puppet dictatorship, a visit to these two cities would put it into perspective.

What is happening in Egypt today, should have happened 30 years ago.

Hock

Chabazite

Virgil - No question about your post of Thursday 05.35 which is largely historical fact. But in your post of Thursday 08.37, you envisage (if I have understood you correctly) that Israel will somehow team up with Syria, the Sauds, and maybe the Kurds to face off some kind of threat from the rest of the Arab world. To me that would make mighty strange bedfellows. Perhaps I have misunderstood?

Hock is right about Ystanbul. It is one of the world's great cities, though I found the Aya Sofia somewhat disappointing in contrast to the Blue Mosque. It is the only city I have ever been in where I was ripped off by a taxi driver. That having been said, the difference between Turkish and Christian Cyprus is quite stark, the former being much poorer. Can't comment on Cairo because I have never been there.

adg

price of copper over 5 soon, stock market going straight up hyperbolic!

MHD

It's magic.....you know......never believe it's not so!!!! Unemployment rate next month will drop to 8% on a negative print. IT'S MAGIC.

Virgil

I'm sure Turks are beautiful people, but they're now openly hostile to Israel.

"To me that would make mighty strange bedfellows."

Who's left? Do you think they're waiting for Obama to stand with them?

Account Deleted

CSCO Chart analysis: http://niftychartsandpatterns.blogspot.com/2011/02/cisco-trying-to-close-gap.html

Mamma Boom Boom

Contrary to the media, unemployment continues to rise:

http://www.screencast.com/users/MammaB/folders/Default/media/ed1a99af-4d05-44e8-b250-faf9e28a1c05

Hockthefarm

Who's left? Do you think they're waiting for Obama to stand with them?

I'm in my 50's now and I've read about this war pretty much all my life. One side has had every piece of military hardware given to them. The other throws stones.

Egypt is a shithole. Talk about failed policy. That anyone is surprised by the changing tides in the ME is a complete joke. The people have nothing worth losing to lose. Like the immortal fish on the river bank, anywhere is better than here.

Hock

grammar police

Contrary to the media, unemployment continues to rise

So the media do not continue to rise?

Chabazite

Who's left? Do you think they're waiting for Obama to stand with them?
----------------------------------------------------------------------
Virgil - I am talking about ISRAEL. The USA has always supported Israel and whilst Jewish people in the USA hold positions of high office are likely to continue doing so. (I am making no judgement there, just an observation). However, I can't remember many times when the Syrians, Saudis or Kurds have ever supported Israel. I would have thought they were sworn enemies.

Chabazite

Contrary to the media, unemployment continues to rise
-----------------------------------------------------
Contrary to Mama, share prices continue to rise :)
Chubby Chabby hoping for a break.

Mamma Boom Boom

>Chubby Chabby hoping for a break.<

Hope is not s strategy.

Nevertheless, while Wednesday may have been worrisome to some, yesterday and today should not be. Both negative breadth days. Some may argue yesterday was not, but it only turned positive at the end of the day, small short squeeze.

Yes, times like this can make you nervous. But, that's what separates the Black Velvet from the Wild Turkey.

Neo-Mamma

Michael

"Contrary to the media, unemployment continues to rise." - Chabazite

And contrary to what you claim, the MANUFACTURING sector added 49,000 jobs, the most since August 1998. This will continue to increase, given Obama's recent 100% write-off tax break for businesses in new investment and equipment.

Mamma Boom Boom

Richard Russell wrote in his most recent letter that the financial position of the US is hopeless. Wonder what took him so long.

grammar police

i'm getting a hopeful, almost desperate vibe from bears

also seeing a lot of doom and gloom in news

i think we're going up

Chabazite

Michael - my comment to Mamma was 'in jest' as they say here in England. But I think you are wrong about manufacturing - see the attached article from Econophile / Seeking Alpha which I thought drew a lot of strands together very well http://seekingalpha.com/article/250805-is-manufacturing-leading-a-recovery

grammar police - I am bearish, but Yelnick would confirm that months ago, in fact nearly a year ago I put forward this picture http://tinypic.com/view.php?pic=2nbsfv8&s=7 which takes us drifting forward until December '11 but still in a bearish pattern. OK, so the ABC correction didn't actually take more than a couple of months to work through, and the 1-5 labelling for the motive waves is debatable, but this, or some variation thereof is still my favoured count. FWIW I think we may still be in 3 of C of the second motive wave. The markets will tumble when the Bernank gets booted out of office, and that will happen because the American people will be sick of him and his misguided antics.

Long way to go yet, and no real sign of desperation I assure you.

Mamma Boom Boom

>i think we're going up
Posted by: grammar police<

Ask your mom if you'd be allowed to put some of your lunch money in stocks. Ok?

grammar

ouch! for an idiot, you pack a punch.

Michael

Chazabite -

Rather than provide a link to an article written by a real estate investor claiming that there is no job growth in the manufacturing sector, perhaps you should look at TODAY'S LABOR REPORT.

+49,000

That's a fact.


Mamma Boom Boom

More on manufacturing:

http://www.screencast.com/users/MammaB/folders/Default/media/11a2642a-73f3-4839-b47a-46ebd6114bd6

LDA

The dollar index held trendline support and bounced smartly. Brent crude oil which had been up to $103 is ending the week just at $100. The dollar has a tendency to go up early in the calendar year-not always but often. For a period of months, the stock market (s&p 500) was moving opposite the dollar moves. There are a number of commodities that do as well--at least in shorter time frames like a week.

Question-does the wave pattern on the dollar suggest that there is an up wave coming and would it/could it be counted as a "3"? On your weekly chart of the index the move from March of 2008 to March of 2009 looks like a 5 wave up. That is followed by what lloks like a 3 wave down that ends in late 2009. Another 5 wave up that ends in June 2010 which some might call a " 1 of 3"? A pristine looking 3 wave down that ends in early November of 2010. From early November to late November what might be a 5 wave up followed by and abc down which brings us to this past week.

I would greatly appreciate if the proper wavers here could have a look at it and comment.

Thanks/LDA

Chabazite

Michael - I did not say there was no growth in the Manufacturing sector today. Neither does the article. What it sets out is why manufacturing has limited LONGER TERM PROSPECTS. Kihdly engage your brain (if you have one).

Eventhorizon

Interesting seasonality observation LDA - seems to be well supported by the last 16 years or so of USD index data. 75% of the last 16 1Q's have been up for an average return of 1.8%.

I created 5000 samples of 16 quarters picked at random from the last 16 years. Less than 5% of the samples showed greater than 75% up quarters, and less than 5% showed more than 1.4% returns.

I am always baffled as to why seasonality is not arbitraged away. Anyone have any idea why this "free" money has not been picked up?

yelnick

Chab, note that mfg is only 11% of the US economy, and that the high ISm numbers are rates of change which may be peaking. We need to see how much weather affected today's numbers, since overall they paint an odd picture. Februry numbers should help explain Jan.

yelnick

LDA, yes, a sound view of the USD based on the DX is that a 78% wave 2 has ended and now we begin a rip roarin' wave 3. The STU sees a five wave pattern in the bounce of the last two days, suggesting a trend change, and the speed of the bounce is faster than the fall, also indicating a trend change; but more time is required before we should confirm a bifurcation back up, and a little weakness on Monday is to be expected first. If this happens, the commodities bubble echo may be over. although it might still go a few months longer.

My target for major reversals beyond the USD remains mid June after QE either ends or is wound down. As goes liquidity, so goes the all-the-one-markets.

yelnick

wave, it is possible that change broke the oil bubble of 2008. another explanation is China pausing in its slow float of the Yuan. A socioeconomic view is that all three were coterminous due to underlying social moo, but not causal.

Wave Rust

yel,

numbers reflect socio or economic or financial decisions.

the COT's show an immediate change in crude positions across the board, even the small specs eventually

http://www.cftc.gov/MarketReports/files/dea/history/hist_energy_lf.htm

that's a long file/page. crude is about half way down.

i'd say volume is a founding member of the "Society for the Movement of Price".

if you change the game or its rules, ((such as Bush's lifting the ban, and Oblahblah's "I voted for it before I voted against it" offshore drilling flip flop,)) ,,,, people will change their views, and thus their investments, trades etc.

And, price moves and usually ahead of a visible change in volume. price is always dragging volume with it, imo, but very very closely behind it. But that's a volume to price argument, with good tests on both sides.

wave rust

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